On January 1, 2019, Dog Obedience Training Co entered its second year of operations. This year the business expanded to include doggy daycare because many customers requested the service. On December 31, 2020, the owner Tim Oram finalized the company?s records, which showed the following items.

The ending capital balance for one period is the beginning capital balance for the next period. There were no owner investments during the year ended December 31, 2020.

Required

Prepare an income statement and statement of changes in equity for the year ended December 31, 2020, and balance sheet at December 31, 2020, similar to Exhibits 1.8, 1.9, and 1.10.

Analysis Component: Analyze the balance sheet and calculate what percentage of the assets at December 31, 2020, were financed by (a) debt and (b) equity.

Exhibits 1.8, 1.9, and 1.10.

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Accounts payable. Accounts receivable. Prepaid rent. $ 6,000 24,000 $ 11,400 Rent expense 62,000 Doggy daycare revenue. Obedience training revenue. Cash. 7,600 21,200 81,300 56,000 15,200 4,100 46,500 Dog kennel equipment. Tim Oram, capital, December 31, 2019*. Tim Oram, withdrawals 121,000 4,400 17,900 11,800 Supplies. Supplies expense.. Utilities expense. Wages expense. Vehicle. Interest expense.. 70,000 Notes payable. 40,000 EXHIBIT 1.8 Income Statement for Organico Organico Income Statement For Month Ended March 31, 2020 Revenues: Food services revenue. $3,800 Teaching revenue 300 Total revenues $4,100 Operating expenses: Rent expense. $1,000 Salarles expense. Total operating expenses. 700 1,700 Profit. $2,400 EXHIBIT 1.9 Statement of Changes in Equity for Organico Organico Statement of Changes In Equity For Month Ended March 31, 2020 Halley Walker, capital, March 1 Investments by owner 2$ -0- $10,000 Profit. 2,400 12,400 Total. $12,400 Less: Withdrawals by owner 600 Halley Walker, capiltal, March 31. $11,800- EXHIBIT 1.10 Balance Sheet for Organico Organico Balance Sheet March 31, 2020 Assets Llabilities $8,400 Accounts payable. 3,600 Notes payable. 6,000 Cash. $ 200 Supplies. 6,000 Equipment. $ 6,200 Total liabilities. Equity Halley Walker, capital $18,000 Total liabilitles and equlty. 11,800 $18,000 Total assets EXHIBIT 1.11 Statement of Cash Flows for Organico Organlco Statement of Cash Flows For Month Ended March 31, 2020 Cash flows from operating activitles $ 4,100 (3,400) (1,000) Cash recelved from clients. Cash pald for supplies Cash pald for rent. Cash pald to employee. Net cash used by operating activitles Cash flows from Investing activities. (700) $(1,000) -0- Cash flows from financing activities Investment by owner Withdrawal by owner. Net cash provided by financing activitles. $10,000 (600) 9,400 Net Increase In cash. Cash balance, March 1 $8,400 -0- Cash balance, March 31.. $8,400 The arrows are provided for education purposes only to omphasize the link batwoen statemonts.